Lyft Driver Taxes in Maine - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Maine

Navigating the scenic routes of Maine as a Lyft driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, earnings from driving are considered self-employment income, requiring careful attention to both federal and state tax obligations.

The IRS requires all Lyft drivers to report their income on Schedule C (Profit or Loss from Business) with Form 1040. Furthermore, because no taxes are automatically withheld from your Lyft earnings, drivers are responsible for paying self-employment taxes, which cover both Social Security and Medicare. Accurate record-keeping throughout the year is crucial for maximizing deductions and ensuring compliance.

How Maine Handles Gig Worker Taxes

As a resident of Maine, filing a state income tax return is mandatory, even if no Maine income tax is owed. Maine utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Maine residents who earn income as independent contractors, such as Lyft drivers, will primarily use Form 1040ME, Maine Individual Income Tax Return, to report their earnings. This form requires reporting your federal Adjusted Gross Income (AGI) and any applicable Maine adjustments.

Maine treats self-employment income similarly to the federal government, requiring you to calculate your net earnings (gross income minus business expenses) and pay income tax on that amount. It's important to note that Maine does not have a separate self-employment tax form; the self-employment tax is calculated on your federal return and impacts your Maine taxable income. Maine also offers various credits and deductions that may be applicable to self-employed individuals, such as the Maine Earned Income Tax Credit. Staying informed about these opportunities can help minimize your tax liability. The Maine Revenue Services website provides detailed information and resources for self-employed individuals.

For the most up-to-date information on Maine tax laws and forms, please visit the Maine Revenue Services website: https://www.maine.gov/revenue/

Top Tax Deductions for Maine Drivers

• Standard Mileage: The most popular deduction for Lyft drivers. For the 2025 tax year, the standard mileage rate is 70 cents per mile. This simplifies expense tracking significantly.
• Tolls & Parking: Maine doesn't have extensive toll roads, but any tolls incurred while actively driving for Lyft are deductible. Parking fees directly related to pickups and drop-offs are also deductible.
• Phone & Data Plan: If you use your personal phone for Lyft, you can deduct the percentage of your monthly bill that corresponds to business use. Keep a log of the time spent driving to accurately calculate this percentage.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, and insulated food bags used for deliveries are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, repairs, and insurance) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Lyft and other ride-sharing platforms do not withhold these taxes from your earnings. Therefore, it is your responsibility to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS. This tax is applied to your net earnings – your gross income minus your business deductions – exceeding $400.